The undoing of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013

The title of this article may sound critical because, in effect, the final interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act) can only come to the rescue of a handful.

The eminent domain’s doctrine prescribes the power to the sovereign to dispossess a person of his property by way of compulsory acquisition for the larger interest of the State without the owner’s consent. In 1952, the Supreme Court, while laying down the broad contours of the eminent domain, held that:

42.  … Shorn of all its incidents, the simple definition of the power to acquire compulsorily or of the term “eminent domain” is the power of the sovereign to take property for public use without the owner’s consent. The meaning of the power in its irreducible terms is, (a) power to take; (b) without the owner’s consent; and (c) for public use. The concept of the public use has been inextricably related to an appropriate exercise of the power and is considered essential in any statement of its meaning. Payment of compensation, though not an essential ingredient of the connotation of the term, is an essential element of the valid exercise of such power. Courts have defined “eminent domain” so as to include this universal limitation as an essential constituent of its meaning. Authority is universal in support of the amplified definition of “eminent domain” as the power of the sovereign to take property for public use without the owner’s consent upon making just compensation.[1]

In its original form, the Constitution of India guaranteed under Article 19(1)(f), the Indian citizens fundamental right to acquire, hold or dispose of the property. However, this fundamental right was subject to reasonable restrictions by the State either in the interests of the general public or for protecting the interests of any Scheduled Tribe. Article 31 made the right to property stronger as it provided that any acquisition of property by the State must only be upon enactment of law, for a public purpose and upon payment of compensation. Section 299 of the Government of India Act, 1935 provided for the protection of the property right against expropriation without proper compensation and also against procurement of land for any use other than for public purpose. Articles 19(1)(f) and 31 were deleted by the Constitution (Forty–fourth Amendment) Act, 1978 from Part III of the Indian Constitution. Instead, it introduced a new provision, Article 300-A, which provided that “no person shall be deprived of his property save by authority of law”.  By the forty-fourth amendment, right to property lost its “fundamental right” status and obtained the status of only a constitutional right, which meant that it could not be challenged directly before the Supreme Court under Article 32.

The assessment of market value for the acquisition of land is a long battle for a landowner. In many cases, the finality of what a landowner is entitled to for acquiring his land remains pending for decades barring a whole generation to get its due. The increasing pressure made land pricier, and forcible acquisitions have started causing grave injustice to the landowners. With industrialisation and growth in the residential sectors for the ever-increasing population, the land became more scarce and costlier. The inequity in the quantum of compensation started to look immense, and people started to protest against the acquisitions. The land acquisition seems a civil death for some, as what was offered was meagre compensation and no rehabilitation or resettlement, inflicting the loss to their livelihoods.

Then came the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Section 24 in the 2013 Act was enacted to undo the historical wrong done after the British rule by the Land Acquisition Act, 1894 (hereinafter referred to as “1894 Act”). The lawmakers could not bring the new legislation to acquire land until 2013 which was demanded by the changing scenario and needs. Section 24 of the 2013 Act contemplated the following situations:

(i) In case no award had been made on the date of the commencement of the 2013 Act i.e. 1-1-2014, then all provisions for determination of compensation in the 2013 Act shall apply.

(ii) In case the award has been passed, then the 2013 Act will have no application.

(iii) In case of land acquired 5 years or more prior to 1-1-2014, where physical possession has not been taken, or compensation has not been paid the proceedings shall be deemed to have lapsed with the Government having the power to acquire afresh.

(iv) In case the award has been made, and compensation in respect of the majority of land holdings has not been deposited, all beneficiaries will be entitled to compensation under the 2013 Act.

So, in a literal interpretation of Section 24, who gets the redressal from the historical wrong done by the 1894 Act?

Questions arose regarding compensation as to what constitutes a proper payment and whether an amount deposited in the court or treasury as the 1894 Act envisaged would be considered sine qua non to a payment in the beneficiaries’ bank account except additional interest as per Section 31 of the 1894 Act. The first view that came from the Supreme Court was that payment in case the compensation is lying in the treasury, the same will not constitute payment. The other dispute arose as to what constitutes possession, whether it is an entry in the inquest report/memorandum (rapat roznamcha) or the actual physical possession. There was no dispute to the post-position of law that in case no award was passed on 1-1-2014 then the compensation has to be determined as per the new Act.

But barring these technicalities beyond the comprehension of a common man, Section 24 was intended to be a saviour to undo the wrong perpetrated at the government’s hands in payment of compensation. To put in common parlance, it meant that the land that is not utilised for the public purpose for which it was acquired, in case it is vacant for the last few years, it will vest back in the original owner by lapsing of the acquisition proceedings or if the Government has not paid the compensation then it will meet the same fate, in both these situations it can be acquired afresh.

“There is no question of ‘come and get’ the compensation while compulsorily acquiring the land; the approach required under the law is ‘go and give’ ” said the Supreme Court in 2016.[2]

The interpretation given by the Constitution Bench of the Supreme Court on Section 24 in Indore Development Authority v. Manoharlal[3] is a narrow view. The judgment closed all such windows as it held on the following six counts:

(1) Firstly, the word “or” used between possession or compensation in Section 24(2) will be read as “and”, in other words, the acquisition will only lapse in case possession has not been taken and compensation has not been paid.

(2) Secondly, the proviso that in case compensation for the majority of land holdings has not been paid will only be read in a situation where there is no lapsing as per Section 24(2); therefore, it cannot be read with Section 24(1).

(3) Thirdly, the word “paid” shall include a deposit of compensation made in a court or treasury.

(4) Fourthly, the mode of taking possession under the 1894 Act and as contemplated under Section 24(2) shall be by drawing of inquest report/memorandum.

(5) Fifthly, the period of subsistence of interim orders passed by the court has to be excluded in the computation of five years as per Section 24(2).

(6) Sixthly, Section 24 applies to a proceeding pending on the date of enforcement of the Act of 2013 i.e. 1-1-2014. It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of the mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury.

The redressal promised by Section 24 faded away.

“The final cause of law”, writes Cardozo, “is the welfare of society”. So much for the formalist idea, whose scientistic provenance and pretensions are evident, of law as a body of immutable principles. Cardozo does not mean, however, that Judges “are free to substitute their own ideas of reason and justice for those of the men and women whom they serve. Their standard must be an objective, one” — but objective in a pragmatic sense, which is not the sense of correspondence with an external reality. “In such matters, the thing that counts is not what I believe to be right. It is what I may reasonably believe that some other man of normal intellect and conscience might reasonably look upon as right.”[4]

To conclude, Section 24 looked like it brought life to the rights of those whose land was compulsorily acquired by the Government, but the land has not been put to use for the purpose it was acquired or achieve the object of acquisition but, the interpretation is otherwise. Section 24 also sought to undo the wrong in payment of compensation since some persons were deprived of the payment, but the fact that it has been held that payment in treasury will be considered as “paid” has closed the door for the same. So, in essence, the interpretation is that even if one of the conditions, that is, taking over of possession “or” the payment of compensation is fulfilled then the benefit of Section 24(2) will not accrue to a person, the word “or” used in Section 24(2) has to be read as “and”.

† Advocate-on-Record, Supreme Court and former Additional Advocate General, Haryana, e-mail: siddharth.batra@satramdass.com.

[1] State of Bihar v. Kameshwar Singh, AIR 1952 SC 252 : 1952 SCR 889.

[2] Aligarh Development Authority v. Megh Singh, (2016) 12 SCC 504.

[3] (2020) 8 SCC 129.

[4] B. Cardozo, The Nature of the Judicial Process.